IPO Frenzy Upcoming Week to Feature 13 Major Public Offerings with a Target of ₹8,644 Crore

Bajaj Housing Finance Leads the Pack as Market Anticipates a Surge in Initial Share Sales

The IPO market is set for a dynamic week ahead, with 13 companies gearing up to launch their initial public offerings. Among these, four main-board IPOs, including Bajaj Housing Finance, aim to raise a combined total of ₹8,390 crore. Additionally, nine SMEs are preparing to debut, targeting a collection of ₹254 crore, pushing the total expected capital raised to ₹8,644 crore.

Munish Aggarwal, Managing Director and Head of Equity Capital Markets at Equirus, predicts a bustling two weeks for the IPO market. He notes that the flurry of activity is not necessarily indicative of an overheated market but rather reflects issuers’ strategies to leverage their Fiscal Year 2024 financials for IPOs.

According to SEBI regulations, financial data in the Red Herring Prospectus (RHP) must be no older than six months at the time of the IPO. Hence, September is the final window for companies to utilize their FY24 financials, intensifying the rush to go public.

Highlights of the Upcoming IPOs

The four main-board IPOs scheduled for launch are:

– Bajaj Housing Finance: Expected to raise approximately ₹6,560 crore
– PN Gadgil Jewellers: Aiming for ₹1,100 crore
– Kross Ltd: Targeting ₹500 crore
– Tolins Tyres: Set to raise ₹230 crore

Bajaj Housing Finance, Kross Ltd, and Tolins Tyres will open their subscriptions from September 9 to September 11, while PN Gadgil Jewellers’ offering will be available from September 10 to September 12. Additionally, Arkade Developers is poised to launch its IPO on September 16, and Western Carriers India might also unveil its public issue soon.

So far in 2024, over 50 main-board IPOs have been launched, alongside a Follow-on Public Offering (FPO) by Vodafone Idea. The public issue of Shree Tirupati Balajee Agro Trading Company is currently in progress, and IPOs for Baazar Style Retail and Gala Precision Engineering recently concluded. In August alone, 10 firms, including Ola Electric Mobility and Brainbees Solutions Ltd (parent company of FirstCry), successfully completed their IPOs.

Market Outlook and Investment Trends

Equirus’ Aggarwal forecasts that the amount raised through main-board IPOs, currently at ₹80,000 crore, is expected to surpass ₹81,250 crore by year-end. Meanwhile, Sunil Damania, Chief Investment Officer at MojoPMS, suggests that continued growth in the primary market hinges on a strong secondary market. A dip in IPO performance could dampen the momentum.

Investors are seeking funds through IPOs for expansion, debt repayment, working capital, and exits for existing shareholders. SME IPOs, including offerings from Aditya Ultra Steel, Shubhshree Biofuels Energy, Share Samadhan, and Gajanand International, are also set to launch next week. These SMEs aim to raise between ₹12-45 crore each.

Recent trends show high subscription levels for IPOs. August’s main-board IPOs were subscribed over 75 times on average, while SME IPOs saw an average subscription rate of 290 times. Vaibhav Porwal, Co-founder of Dezerv, attributes this surge to liquidity, the fear of missing out (FOMO), and strong retail participation. However, he cautions that market corrections and regulatory changes could affect this trend.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, warns that the excessive oversubscription of SME IPOs, driven by retail investors, signals potential market excesses. Regulatory concerns are also emerging, with expectations of a possible slowdown in SME IPO activity.

Investors are advised to remain cautious and focus on fundamental values amidst this bustling IPO landscape.